New York (AFP)
Wall Street fell heavily Wednesday in a climate of uncertainty surrounding the global economy, while the precursors of a recession in the United States multiply.
Its flagship index, the Dow Jones Industrial Average fell 3.05% to 25,479.42 points, the heaviest loss of the year.
The Nasdaq, with strong technological coloration, yielded 3.02% at 7,773.94 points and the broad index S & P 500 dropped 2.93% to 2,840.60 points.
The day after a session where Wall Street ended in the green, carried by a respite in the trade war between Beijing and Washington, the New York Stock Exchange plummeted on Wednesday, several economic indicators causing a wave of concern among investors.
Statistics on the growth of Chinese industrial production, which fell to a 17-year low in July, sent the stock market cold.
The contraction of economic activity in Germany in the second quarter added to the prevailing pessimism.
After the release of this data and prior to the opening of the stock market, the yield on 10-year US Treasury bills temporarily dropped below the two-year coupon rate for the first time since 2007.
This phenomenon, known as the "reversal of the yield curve", reflects the yield difference granted by the US government to investors who are betting on its short-term or long-term debt.
Particularly feared financial markets, it is usually the leading indicator of a recession.
"If this reversal is confirmed, it would mean that the stock market would suffer even more because of uncertainties, and that there would be a rush of assets deemed more secure", such as bonds, said Peter Cardillo of Spartan Capital Securities .
At around 8:20 pm GMT, the 10-year debt rate was 1.582 percent and the 2-year debt rate was 1.577 percent.
The interest rate on the 30-year-old debt fell during the session to its all-time low.
The combination of indicators and falling long-term rates "increases the fear of an impending recession," says Canaccord Genuity strategist Tony Dwyer.
But this could also prompt the US central bank (Fed) to lower interest rates more strongly in the coming months and thus "trigger a rebound in economic activity by the end of the year", tempers-t -he.
© 2019 AFP